>In just thirty years, Gurgaon has grown from a tiny hamlet to a city of nearly two million people and it has done so based almost entirely on the private provision of public goods, including transportation, utilities, and security. In some rankings, Gurgaon is the best city in India in which to live and work (Behl 2009). Gurgaon, however, lacks important infrastructure, especially in areas such as sewage and electricity where the optimal scale exceeds that of most builders. Thus, for large-scale infrastructure, important externalities are not internalized. We examine where Gurgaon has succeeded, where it has failed, and how people are adapting to both the successes and the failures. We compare Gurgaon with other private cities built on a different model, including Jamshedpur in India and Walt Disney World in the United States. The developing world, including India, is urbanizing rapidly. We draw lessons from Gurgaon to suggest how new private cities could be built on an even-greater scale, thus internalizing externalities while still keeping the advantages of private provision.
Gurgaon is actually a worst place to live. Less secure, electricity and water problem, sewage. I can't imaging living in that place. I was there for barely one month and I quit.
> Gurgaon, however, lacks important infrastructure, especially in areas such as sewage and electricity where the optimal scale exceeds that of most builders.
I'm not sure I see how this explanation makes sense. How can a bunch of bumbling elected city councils manage to construct adequate water and sewer works, and private builders who actually know what they are doing cannot.
It's like roads. Private builders enter into agreements all the time to enter into deals with local governments where they'll expand roads or whatever right around where they're developing. If you get lucky you'll have a contiguous string of adjacent developers and you'll end up with a nice road for a few miles. If you're unlucky, you'll end up with 4 lane divided road-farm road-4 lane divided road-farm road, off and on for miles and miles and it's pretty much the worst.
Private developers don't have incentive to build a national highway system, they'll just build whatever is the minimum necessary that figures into their profit model.
Private developers will build whatever people want, which sometimes is completely unlike what people need. Sometime back, there was a recently built over-55 community discussed here. It looked just like your generic subdivision. One wonders how much misery will be there 20 years from now. Wide roads without sidewalks are not good for people with low mobility and vision problems, and there is no adequate hospital and nursing services around, not even a food store within close distance. The future in that development will be fun to watch.
> Private developers will build whatever people want
I think maybe a better way to think of it is that developers will build whatever makes them money -- a good enough proxy for wants in many cases, but not for all.
Could be similar to Dubai, where i think they had problems with buildings being erected faster than the infrastructure could be expanded to handle them. End result were skyscrapers that had to get their sewage removed by truck each day, etc.
And this, ladies and gentlemen, is why planning permission was invented. Your proposed subdivision exceeds capacity of existing roads? Sorry, can't build here, because you can't make bank while unloading your externalities on the town council or the county. You want to build in a floodplain? Sorry dude, can't have that, it will flood, and everyone living there is suddenly a burden on the public purse because their savings vehicle has just been drowned.
You want to not let people build skyscrapers to protect the egos of city authorities that can't build a sewage system that would meet the western standards of 100 years ago? Dubai has problems, but tall buildings aren't one of them.
> How can a bunch of bumbling elected city councils manage to construct adequate water and sewer works, and private builders who actually know what they are doing cannot.
It's mostly to do with power and coordination. The private sector is great at meeting needs very efficiently, but the market needs to be shaped in the right way to make sure they don't burn the world to make your iced tea a little sweeter :)
>In just thirty years, Gurgaon has grown from a tiny hamlet to a city of nearly two million people and it has done so based almost entirely on the private provision of public goods, including transportation, utilities, and security. In some rankings, Gurgaon is the best city in India in which to live and work (Behl 2009). Gurgaon, however, lacks important infrastructure, especially in areas such as sewage and electricity where the optimal scale exceeds that of most builders. Thus, for large-scale infrastructure, important externalities are not internalized. We examine where Gurgaon has succeeded, where it has failed, and how people are adapting to both the successes and the failures. We compare Gurgaon with other private cities built on a different model, including Jamshedpur in India and Walt Disney World in the United States. The developing world, including India, is urbanizing rapidly. We draw lessons from Gurgaon to suggest how new private cities could be built on an even-greater scale, thus internalizing externalities while still keeping the advantages of private provision.
[0]: https://mason.gmu.edu/~atabarro/TabarrokPublishedPapers.html